GR 171685; (October, 2010) (Digest)
G.R. No. 171685 ; October 11, 2010
LAND BANK OF THE PHILIPPINES, Petitioner, vs. GLENN Y. ESCANDOR, GEROME Y. ESCANDOR, EMILIO D. ESCANDOR and VIOLETA YAP, Respondents.
FACTS
Respondents are registered owners of agricultural lands in Davao del Sur placed under compulsory acquisition by the Department of Agrarian Reform (DAR) in 1995 pursuant to the Comprehensive Agrarian Reform Program. Petitioner Land Bank of the Philippines (LBP) valued the properties and deposited the amounts, which respondents rejected. The DAR upheld LBP’s valuation. Consequently, respondents filed complaints for determination of just compensation before the Regional Trial Court (RTC) acting as a Special Agrarian Court (SAC). The SAC, favoring a market value approach over LBP’s income-based formula, awarded respondents a total of ₱4,590,000.00. LBP appealed, arguing the SAC violated RA 6657 and DAR administrative orders.
ISSUE
Whether the Court of Appeals correctly remanded the case to the SAC for recomputation of just compensation.
RULING
Yes. The Supreme Court affirmed the Court of Appeals’ decision to remand the case. The Court reiterated that the determination of just compensation is a judicial function. While Section 17 of RA 6657 and the related DAR administrative orders provide the factors and formulas for valuation, the SAC is not strictly bound to apply them in a rigid, formulaic manner. The court must consider all factors to arrive at the full and fair equivalent of the property taken from the owner. The SAC’s decision, while opting for a market value approach, failed to clearly state the factual and legal bases for its specific valuation figures. It did not indicate the applicable formula or the evidence considered for each factor under Section 17. Furthermore, just compensation must be based on the value of the property at the time of its taking, which was not clearly established, and must include legal interest from the time of taking until full payment to compensate for the delay. Thus, a remand for proper recomputation, with a clear explanation of the basis and mathematical computation, was necessary to ensure respondents receive the correct just compensation as mandated by law.